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+++ version:(document, no version)
@@ -1,257 +1,196 @@
-HOUSE BILL 167
+Fiscal impact reports (FIRs) are prepared by the Le gislative Finance Committee (LFC) for standing finance
+committees of the Legislature. LFC does not assume responsibility for th e accuracy of these reports if they
+are used for other purposes.
 
-57th legislature - STATE OF NEW MEXICO - second session, 2026
+F I S C A L    I M P A C T    R E P O R T
 
-INTRODUCED BY
+BILL
+NUMBER: House Bill 167
 
-Cristina Parajón and Patricia Roybal Caballero
+SHORT TITLE: Notice Of Sale Of Mobile Home Parks
+SPONSOR: Parajón/Roybal Caballero
 
-AN ACT
+LAST
+UPDATE:
+ ORIGINAL
+DATE:
 
-RELATING TO PROPERTY; ENACTING A NEW SECTION OF THE MOBILE HOME
-PARK ACT TO REQUIRE NOTICE BEFORE THE SALE OF A MOBILE HOME
-PARK; CREATING AN OPPORTUNITY TO PURCHASE; PROVIDING FOR
-ENFORCEMENT; INCREASING THE AMOUNT OF THE CAPITAL GAINS INCOME
-TAX DEDUCTION FOR THE SALE OF A MOBILE HOME PARK TO RESIDENTS
-OF THE MOBILE HOME PARK PURSUANT TO THE MOBILE HOME PARK ACT.
+2/4/26
 
-BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
+ANALYST
+: Graese
+r
 
-     SECTION 1.  A new section of the Mobile Home Park Act is
-enacted to read:
+REVENUE*
+(dollars in thousands)
+Type FY26 FY27 FY28 FY29 FY30 Recurring or
+Nonrecurring
+Fund
+Affected
+PIT $0
+Indeterminate
+but minimal
+loss
+Indeterminate
+but minimal
+loss
+Indeterminate
+but minimal
+loss
+Indeterminate
+but minimal
+loss
+Recurring General Fund
+Parentheses indicate revenue decreases.
+*Amounts reflect most recent analysis of this legislation.
 
-     "[NEW MATERIAL] SALE OF A MOBILE HOME PARK--NOTICE
-REQUIREMENTS--OPPORTUNITY TO PURCHASE.--
+ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
+(dollars in thousands)
+Agency/Program FY26 FY27 FY28 3 Year
+Total Cost
+Recurring or
+Nonrecurring
+Fund
+Affected
+TRD Indeterminate
+but minimal
+Indeterminate
+but minimal
+Indeterminate
+but minimal
+Indeterminate
+but minimal Recurring General Fund
+Parentheses ( ) indicate expenditure decreases.
+*Amounts reflect most recent analysis of this legislation.
 
-          A.  Before a mobile home park may be sold, the owner
-shall notify each resident of the mobile home park and the
-executive director of the New Mexico mortgage finance authority
-of any third-party offer to purchase that the owner intends to
-accept.
+Sources of Information
 
-          B.  All notices pursuant to this section shall:
+LFC Files
 
-                (1)  be in writing;
+Agency or Agencies Providing Analysis
+None
 
-                (2)  be sent by first-class certified mail with
-tracking and return receipt requested;
+SUMMARY
 
-                (3)  be posted on the front door of each
-resident household in the mobile home park;
+Synopsis of House Bill 167
 
-                (4)  include the material terms, conditions and
-amount of the offer;
+House Bill 167 (HB167) en acts a new section of the Mobile Home Park Act to  require notice
+prior to the sale of a mobile home park and cr eates a new set of rights for mobile home park
+tenants when the mobile home park  has been listed for sale. If 51 percent of the tenants wish to
+purchase the park at a price and with terms comparable to a third-party offer, the selling owner is
+required to negotiate in good faith a sale to those tenants. Comp rehensive rules are established
+for procedures in this regard. Vi olations of the provisions of the bill could trigger civil penalties
+of up to $100 thousand.
+House Bill 167 – Page 2
 
-                (5)  in the case of a proposed sale of more
-than one mobile home park or a mobile home park and one or more
-other nonrelated properties in a single transaction, state both
-the aggregate price and the price of the mobile home park in
-which the residents receiving the notice reside; and
+This bill also increases the amount of the capita l gains income tax deduction for the sale of a
+mobile home park to residents fro m 40 percent with a limit of $1 million to 50 percent with no
+limit.
 
-                (6)  include a notice that enumerates the
-residents' rights as provided in this section.
+This bill does not contain an effective date and, as  a result, would go into effect 90 days after the
+Legislature adjourns, which is May 20, 2026. The cap ital gains provisions are applicable for tax
+years beginning on or after January 1, 2026.
 
-          C.  The owner shall provide the residents the
-opportunity to purchase the mobile home park before the owner
-accepts the third-party offer to purchase identified in the
-notice to residents if:
+FISCAL IMPLICATIONS
 
-                (1)  within seventy-five days from the date
-when notice was posted on residents' homes, the owner is
-provided:
+This bill creates or expands a tax expenditure w ith a cost that is difficult to determine but
+unlikely significant. Estimating the cost of tax e xpenditures ex ante is difficult. Confidentiality
+requirements surrounding certain taxpayer inform ation create uncertainty, and analysts must
+frequently interpret third-party da ta sources. The statut ory criteria for a ta x expenditure may be
+ambiguous, further complicating the initial cost estimate of th e fiscal impact. Once a tax
+expenditure has been approved, information constrai nts continue to create challenges in tracking
+the real costs (and benefits) of  tax expenditures. LFC has serious  concerns about the substantial
+risk to state revenues from tax expenditures and the increase in revenue volatility from erosion of
+the revenue base. The committee recommends the bill adhere to the LFC tax expenditure policy
+principles for vetting, targeti ng, and reporting or action be post poned until the implications can
+be more fully studied.
 
-                     (a)  documentation that verifies that the
-owners of at least fifty-one percent of the mobile homes in the
-mobile home park that are occupied by a resident or a family
-member of the resident have approved purchase of the mobile
-home park by the residents; and
+A typical mobile home park (MHP ) is often valued around $1 mi llion, though prices range from
+under $500 thousand for small, ru ral parks to over $5 million fo r large, urban, or modern
+amenity-rich communities. A common valuation metric is $12 thousand to $30 thousand per pad
+or using a (7-10 percent) cap rate on net inco me, often calculating to roughly (70) times the
+monthly lot rent per occupied space.
 
-                     (b)  a proposed purchase and sale
-agreement offered at the same price and on substantially
-equivalent terms and conditions as the offer to purchase
-identified by the owner in the notice to the residents;
+Assume five sales a year at an average sale  price of $2 million. The 10 percent increase in
+deduction percentage results in increased deduc tion of $200 thousand x 5 x 2.18 percent average
+PIT rate = ($21.8 thousand). This can be considered minimal.
 
-                (2)  residents who wish to purchase the mobile
-home park execute a purchase and sale agreement and within
-ninety days following execution obtain a binding commitment for
-any necessary financing or guarantees; and
+SIGNIFICANT ISSUES
 
-                (3)  residents who wish to purchase the mobile
-home park close on the purchase within a commercially
-reasonable amount of time specified in the purchase and sale
-agreement.
+Of note, mobile home parks are either POHs or TOHs. POH is park-owned homes and TOH is
+tenant-owned homes.
 
-          D.  Residents and an owner may extend any of the
-time periods provided in Subsection C of this section by
-agreement.
+PERFORMANCE IMPLICATIONS
 
-          E.  An owner shall not refuse to enter into or delay
-the execution or closing on a purchase and sale agreement with
-residents who submit an offer that contains the same price and
-substantially equivalent terms and conditions to the third-party offer.  A failure by residents to meet the requirements
-of Paragraphs (1) through (3) of Subsection C of this section
-shall terminate the residents' opportunity to purchase.
+The LFC tax policy of accountabil ity is met because TRD is requi red in the bill to report
+annually to an interim legisla tive committee regarding the data compiled from the reports from
+taxpayers taking the credit and other information to determine whether the credit is meeting its
+purpose. The tax expenditure will be included in  the annual Tax Expenditure Report required by
+Section 7-1-84 NMSA 1978.
 
-          F.  In the event that residents submit a proposed
-purchase and sale agreement that an owner does not consider to
-be the same price or substantially equivalent in terms and
-conditions to the third-party offer, the owner shall negotiate
-with the residents in good faith to determine if an agreement
-can be made that would allow the residents to purchase the
-mobile home park.  The duty of good faith includes a duty to
-make the same information available to residents that the owner
-has provided to the third-party offeror or another prospective
-purchaser.  If the owner rejects the residents' proposed
-purchase agreement, the owner must provide the reason in
-writing to the residents within three days of the date of
-rejection.  It shall be presumptive evidence of bad faith if an
-owner attempts to, or does, require the residents to waive any
-of their rights.
+ADMINISTRATIVE IMPLICATIONS
 
-          G.  An owner may accept a third-party offer to
-purchase the owner's mobile home park before providing the
-notice and opportunity to purchase pursuant to Subsections A
-and B of this section if the purchase and sale agreement
-executed stipulates that the residents shall be provided with
-notice and the opportunity to purchase the mobile home park in
-accordance with Subsections A and B of this section before the
-sale may be finalized.
+Minimal for TRD.
+House Bill 167 – Page 3
 
-          H.  Nothing in this section shall be construed to
-require an owner to provide financing to residents, except to
-the extent that financing would be provided to a third-party
-offeror.  The residents who wish to purchase the mobile home
-park as provided in this section may assign their rights
-provided in this section to a local or state government, state
-agency, housing authority, tribal government or nonprofit
-organization for the purpose of continuing the use as a mobile
-home park.
+OTHER SUBSTANTIVE ISSUES
 
-          I.  The opportunity to purchase created in this
-section shall inure to the residents beginning on the date that
-notice was received by each of the residents.  An owner shall
-comply with all provisions of this section in connection with
-any new offer to sell the owner's mobile home park or any new
-offer to purchase the owner's mobile home park that the owner
-intends to accept.  A new offer to purchase or sell the owner's
-mobile home park shall initiate a new effective period for the
-opportunity to purchase.
+In assessing all tax legislati on, LFC staff considers whether th e proposal is aligned with
+committee-adopted tax policy principles. Those five principles:
+• Adequacy: Revenue should be adequate to fund needed government services.
+• Efficiency: Tax base should be as broad as possible and avoid excess reliance on one tax.
+• Equity: Different taxpayers should be treated fairly.
+• Simplicity: Collection should be simple and easily understood.
+• Accountability: Preferences should be easy to monitor and evaluate
 
-          J.  If residents have submitted a proposed purchase
-and sale agreement that meets the price and is substantially
-equivalent in terms and conditions to the offer that the owner
-intends to accept, the residents may record an affidavit with
-the county clerk of any county where the mobile home park is
-located certifying that an offer has been made to the owner by
-the residents.
+In addition, staff reviews whethe r the bill meets principles speci fic to tax expenditures. Those
+policies and how this bill addresses those issues:
 
-          K.  The provisions of this section shall apply to
-all counties and municipalities, including home rule
-municipalities.
+Tax Expenditure Policy Principle Met? Comments
+Vetted: The proposed new or expanded tax expenditure was vetted
+through interim legislative committees, such as LFC and the Revenue
+Stabilization and Tax Policy Committee, to review fiscal, legal, and
+general policy parameters.
+
+Targeted: The tax expenditure has a clearly stated purpose, long-term
+goals, and measurable annual targets designed to mark progress toward
+the
+goals.
+ Implicit purpose is to
+encourage tenants
+to gather the
+resources to buy
+their mobile home
+pads
+Clearly stated purpose 
+Long-term goals 
+Measurable targets ?
+Transparent: The tax expenditure requires at least annual reporting by
+the recipients, the Taxation and Rev enue Department, and other relevant
+agencies
+
+Accountable: The required reporting allows for analysis by members of
+the public to determine progress toward annual targets and determination
+of effectiveness and efficiency. The tax expenditure is set to expire unless
+legislative action is taken to review the tax expenditure and extend the
+expiration date.
 
-          L.  An owner shall not be required to give notice to
-residents as required in this section if:
+Public analysis 
+Expiration date 
+Effective: The tax expenditure fulfills the stated purpose.  If the tax
+expenditure is designed to alter behavior – for example, economic
+development incentives intended to increase economic growth – there are
+indicators the recipients would not have performed the desired actions
+“but for” the existence of the tax expenditure.
+ This may be the
+only way to
+encourage park
+owners to negotiate
+sale with tenants.
+Fulfills stated purpose ?
+Passes “but for” test ?
+Efficient: The tax expenditure is the most cost-effective way to achieve
+the desired results. ?
+Key:  Met      Not Met     ? Unclear
 
-                (1)  a bank, mortgage company or any other
-mortgagee has foreclosed on the mobile home park and the
-mortgagee is selling the mobile home park:
-
-                     (a)  at a foreclosure sale; or
-
-                     (b)  after having purchased the mobile
-home park at a foreclosure sale;
-
-                (2)  the sale or transfer is to a family member
-of the owner or to a trust, the beneficiaries of which are
-family members of the owner;
-
-                (3)  the sale or transfer is by a partnership
-to one or more of its partners;
-
-                (4)  the conveyance of an interest in the
-mobile home park is incidental to the financing of the mobile
-home park;
-
-                (5)  the sale or transfer is between joint
-tenants or tenants in common; or
-
-                (6)  the sale is pursuant to eminent domain.
-
-          M.  An owner who sells a mobile home park in
-violation of the provisions of this section shall be liable to
-each resident who together with other residents offered to
-purchase the mobile home park.  An owner who violates the
-provisions of this section shall be liable for the aggregate
-amount of one hundred thousand dollars ($100,000) or twenty
-percent of the appraised value of the mobile home park,
-whichever is greater.  The damages owed to a resident by an
-owner shall be a lien on the mobile home park property and
-shall take priority over a third-party buyer's interest.  For
-the purposes of this subsection, residents who possessed the
-opportunity to purchase shall select a real estate appraiser
-licensed pursuant to the Real Estate Appraisers Act, and the
-owner shall be liable for the reasonable cost of the appraisal.
-
-          N.  An action to enforce the provisions of this
-section may be brought by:
-
-                (1)  the attorney general;
-
-                (2)  a resident or residents who possess the
-opportunity to purchase; or
-
-                (3)  a person who has been assigned the
-opportunity to purchase.
-
-          O.  A resident who prevails in an action brought to
-enforce this section shall be entitled to receive reasonable
-attorney fees and court costs from the owner.
-
-          P.  If an organization controlled by residents or a
-group of residents becomes the owner of a mobile home park
-pursuant to this section, the organization shall be open to
-membership to all owners of mobile homes who occupy the home
-and live in the community."
-
-     SECTION 2.  Section 7-2-34 NMSA 1978 (being Laws 1999,
-Chapter 205, Section 1, as amended) is amended to read:
-
-     "7-2-34.  DEDUCTION--NET CAPITAL GAIN INCOME.--
-
-          A.  A taxpayer may claim a deduction from net income
-in an amount equal to the greater of:
-
-                (1)  the taxpayer's net capital gain income for
-the taxable year for which the deduction is being claimed, but
-not to exceed two thousand five hundred dollars ($2,500); [or]
-
-                (2)  forty percent of up to one million dollars
-($1,000,000) of the taxpayer's net capital gain income from the
-sale of a business that is allocated or apportioned to New
-Mexico pursuant to Section 7-2-11 NMSA 1978 for the taxable
-year for which the deduction is being claimed; or
-
-                (3)  fifty percent of the taxpayer's net
-capital gain income from the sale of a mobile home park
-pursuant to Section 1 of this 2026 act.
-
-          B.  Married individuals who file separate returns
-for a taxable year in which they could have filed a joint
-return may each claim only one-half of the deduction provided
-by this section that would have been allowed on the joint
-return.
-
-          C.  The deduction provided by this section shall be
-included in the tax expenditure budget pursuant to Section
-7-1-84 NMSA 1978, including the annual aggregate cost of the
-deduction.
-
-          [C.] D.  As used in this section, "net capital gain"
-means "net capital gain" as defined in Section 1222 (11) of the
-Internal Revenue Code."
-
-     SECTION 3.  APPLICABILITY.--The provisions of Section 2 of
-this act apply to taxable years beginning on or after January
-1, 2026.
-
-- 9 -
+LG/cf